Today’s US Non-Farm Payrolls figure, widely considered the most significant economic indicator on the forex calendar, is set to generate heavy trading today. At the moment, analysts are predicting that the US added somewhere around 150K jobs in January. Should the final result come in below expectations the USD may come under renewed pressure to close out the week.
Forex Market Trends
| EUR/USD | GBP/USD | USD/JPY | USD/CHF | AUD/USD | EUR/GBP | |
| Daily Trend |  |
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| Weekly Trend | |
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| Resistance | 1.3230 | 1.5900 | 77.00 | 0.9245 | 10780 | 0.8390 |
| 1.3210 | 1.5880 | 76.80 | 0.9225 | 1.0760 | 0.8370 | |
| 1.3180 | 1.5850 | 76.50 | 0.9195 | 1.0730 | 0.8340 | |
| Support | 1.3120 | 1.5790 | 75.90 | 0.9135 | 1.0670 | 0.8280 |
| 1.3090 | 1.5760 | 75.60 | 0.9105 | 1.0640 | 0.8250 | |
| 1.3070 | 1.5740 | 75.40 | 0.9085 | 1.0620 | 0.8230 |
Economic News
USD – Negative Euro-Zone News Gives USD Temporary Boost
Fresh concerns regarding Greece’s debt negotiations sent investors to safe-haven assets during the beginning of yesterday’s trading session. The news resulted in the US dollar recouping some of its recent losses against the euro. The EUR/USD dropped to the 1.3085 level before staging a correction during the evening session. The greenback was not as fortunate against other riskier currencies. The AUD/USD range traded for much of the day, maintaining its recent bullish trend around the 1.0725 level.
Turning to today, traders can expect significant volatility in the marketplace as the US Non-Farm Employment Change figure is set to be released. Wednesday’s ADP Non-Farm figure, which is widely considered an accurate predictor of today’s news, came in below expectations and resulted in some bearish movement for the US dollar.
At the moment, analysts are predicting that the US added 150K jobs in January. Should the final figure come in significantly below that number, the greenback may extend its losses. At the same time, traders will want to note that the employment statistic is notoriously difficult to predict. A better than expected figure is entirely possible, and could result in dollar gains ahead of markets closing for the weekend.
EUR – EUR Turns Bearish Following Greek Debt Uncertainties
The euro saw bearish movement during the European session yesterday, amid fresh worries that Greece’s negotiations with its creditors may prove to me more difficult than originally thought. Additionally, worries regarding Portugal’s sovereign debt added to investor pessimism regarding the euro-zone economic recovery. As a result, the EUR/USD dropped as low as 1.3085 before staging an upward correction toward the evening session. Similarly, the EUR/JPY tumbled almost 100 pips, reaching as low 99.59 before staging a reversal.
Turning to today, the US Non-Farm Payrolls Figure is likely to dictate the direction markets take and traders can expect extreme volatility when the indicator is released at 13:30 GMT. At the moment analysts are predicting that the US added around 150K jobs in January. A worse than predicted result is likely to weigh down on the dollar and could give the euro a significant boost to close out the week. At the same time, should the employment number come in above expectations, the common currency may extend its downward movement.
JPY – JPY Maintains Upward Trend against USD
The USD/JPY stayed largely bearish throughout yesterday’s trading session, as concerns continue to grow that the Bank of Japan (BOJ) may soon intervene to limit the yen’s strength. Japan’s export based economy is negatively impacted when the yen displays bullish strength. The USD/JPY was largely range trading yesterday between 76.03 and 76.20. Analysts are warning that should the pair drop to around the 75.50 level, the BOJ may make a move.
Whether or not the pair could drop that low today, will largely be dependent on the US Non-Farm Payrolls figure, set to be released at 13:30 GMT. Traders will want to note that should the figure come in below expectations, the yen is likely to extend its bullish trend on the dollar. Whether or not that will lead to the BOJ intervening in the market place is not yet known, but traders will want to pay careful attention to the news to find out.
Crude Oil – Crude Oil Tumbles amid Increase in Risk Aversion
Crude oil continued to fall throughout the day yesterday, as fresh euro-zone debt concerns drove investors away from riskier assets. The commodity fell as low as $96.24 a barrel during the European session before staging a slight upward correction. Fresh concerns regarding both Greek and Portuguese debt contributed to the bearish direction oil took. Crude often falls when there is a bearish outlook for riskier currencies, largely because the commodity becomes less attractive to international investors.
Whether or not crude will maintain this trend today will largely be dependent on the results of the US Non-Farm Payrolls figure, set to be released at 13:30 GMT. A worse than expected US jobs figure may weigh down on the dollar ahead of markets closing for the week. In such a case, the euro may see a boost which would likely result in a bullish reversal for oil.
Technical News
EUR/USD
After steadily increasing in recent days, technical indicators are now showing that this pair may see a downward correction in the near future. The daily chart’s Williams Percent Range is currently at the -10 level, while the Relative Strength Index has drifted above 70. Going short may be the preferred strategy today.
GBP/USD
Technical indicators are showing that this pair is in overbought territory and could see a bearish correction shortly. A bearish cross has formed on the daily chart’s Stochastic Slow, while the Relative Strength Index on the same chart is well into the overbought zone. Going short could prove to be the wise choice.
USD/JPY
While a bullish cross has formed on the daily chart’s Stochastic Slow, indicating impending upward movement, the Relative Strength Index on the same chart is in neutral territory. Traders may want to take a wait and see approach for this pair, as a clearer trend may present itself later on.
USD/CHF
Technical indicators on the daily chart show this pair trading in oversold territory, which is typically a sign of impending upward movement. The Williams Percent Range has drifted below the -90 level, while the Relative Strength Index is at 20. Opening long positions may be the wise choice.
The Wild Card
AUD/NZD
Most technical indicators show this pair trading in the oversold zone, typically a sign that upward movement could occur in the near future. A bullish cross has formed on the daily chart’s Stochastic Slow, while the Relative Strength Index on the same chart is hovering around the 30 level. forex Forex traders may want to go long in their positions today, ahead of a possible upward breach.
Written by Forexyard.com